Capital Tax

Thomas Piketty’s book, Capital in the 21st Century, has received a great deal of press. Having just finished the book, I believe that most of the commentators skimmed/skipped the first two parts and just read the last two parts. Unless you are an econ geek (I am not.), the first two parts are pretty tedious and difficult. However, they do provide Piketty with his bona fides. Anyone who criticizes Piketty on the basis of his credentials probably hasn’t read/understood Parts 1 and 2.

Parts 3 and 4 are where the meat of Piketty’s argument is discussed. My interpretation of his main points is as follows:

Income inequality is increasing in all the OECD (economically-developed and democratic) countries.

Wealth/capital inequality is even worse than income inequality.

The United States is the most unequal of the OECD nations.

A progressive tax on income is good, but a progressive tax on capital/wealth would be much, much better.

Billionaires can hide most of their wealth so that they end up paying taxes on their much lower level of income.

In order to implement a progressive tax on capital, banks must provide governments all data on their depositors so that wealth cannot be hidden.